Cryptocurrency mining

2. As such, what is cryptocurrency mining?

Cryptocurrency mining is the progressive development in which miners use the well-known hashes (computer power), with the idea of ​​carrying out transactions and getting rewards, which in this case would be cryptocurrencies. In other words, it is a method of adding new transaction records made up of blocks, to the blockchain itself. Or equally, it is the method of recording blockchain transactions, in exchange for a fee, endowed in the same kind of cryptocurrency, which is being mined.

We can point out as one of the main characteristics of this mining the concentration of resources. What it comes to tell us is that a large amount of computing power is needed that can meet the demands of mining as such. Apart from consenting that all the participants of the mining network agree on the efficiency and accuracy of the block chain. In turn, not only must own a great mining machine with computing powerbut You must also have a guaranteed electrical power network..

One aspect to keep in mind when we enter the world of cryptocurrency mining is that it, you need specific software to solve mathematical problems. In addition, verification of the legal transaction that affirms that a block is a block as such is required. These blocks are added to the blockchain, more or less every 10 minutes.

it is then when the program processes the transaction that the miner receives an amount of digital currencies or cryptocurrencies. The faster the miner’s hardware operates to solve math problems, the more likely it is to authenticate transactions and receive rewards.

3. What do we need to be able to mine cryptocurrencies?

In order to mine a particular cryptocurrency, you will need appropriate hardware that mines that coin. It will depend on the currency, knowing if a asic miner (computer focused on extracting a specific coin) or a computer with a GPU high perfomance.

In certain cases, you may use a CPUs, also known as a central processor. It is not surprising that for each type of currency that you want to extract, a different hardware is necessary, since if we use the wrong hardware, we will only be able to lose our money.

If the miner uses a GPU, he will be able to extract any type of currency without much difficulty., as long as they can be output with graphics cards. This rule as such is not attributed to ASIC miners. What is most recommended is that we make sure we have a mining machine that is suitable for extracting the amount of money that we want to mine. At the same time, we will require a continuous network connection that does not stop your work.

In this case the key will not be speed, but stability. To accompany, we will need a stable power supply of electricity at a reduced price. This is due to the fact that the price of electricity itself greatly affects the amount of profit, therefore, it will be necessary to discover the cheapest electricity.

4. Remuneration of cryptocurrencies and mining process

The hardware is positioned at the service of a network of crypto assets (such as Bitcoin) at the time the cryptocurrency mining is processed. What this program achieves is to grant its power to emphasize to us that the transactions that have been carried out on the network by the users are correct. At the time the transactions are validated, they are grouped into blocks. These are added to the blockchain or chain of blocks later. Roughly speaking, this is what the cryptocurrency mining procedure would consist of.

The reward is created each time a new block is added to the chain. The remuneration in cryptocurrency mining itself is made up of two sections: on the one hand, the commissions that the participating users pay from the transactions that consist of the new added block and on the other, from the new digital currencies that are put into circulation. This is where it is estimated that it is so attractive for miners to carry out high investments in machines and systems to mine cryptocurrencies. Today, each Bitcoin miner earns 6.25 BTC for each block they complete.

In short, the cryptocurrency mining procedure tries to group the transactions and validate themwhich users do in a certain network, in blocks that later they will be unified to the Blockchain chain of blocks. The procedure, apart from creating a new amount of digital coins, which will be granted to the miner, will provide security to the network. The amount of coins that is awarded to the miner will be accompanied by the commissions paid by those who carry out the transactions that make up the additional block.

5. What are the types of mining that currently exist?

In the cryptocurrency mining procedure as such there are two types, which are:

pow (Proof of Work), which would be translated as a proof of work. It is the most used operating system when mining currencies such as Bitcoin. For this kind of mining it is necessary to have high power machines that can solve a variety of hash puzzles. As long as these puzzles are not solved, it will not be possible to raise a new block to add to the Blockchain chain. It will also not be possible to create the new digital currencies as compensation for the miner’s effort.

POS (Proof of Shake), which would mean proof of participation. This particular model is based on the purchasing power of the miner. What comes to be translated as the more cryptocurrencies you have, the greater the possibility of mining. Therefore, it consists of a mining model based on motivation. This Proof of Stake was created as a replacement idea for PoW. In this way, it was sought to solve any inconvenience that this second has had. Currently, there are many cryptocurrencies that use the PoS method, since it helps to preserve its value in the financial market.


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